The two Canadian fintechs plan to expand their digital offerings across Canada and beyond
Canadian fintech firm Mogo Inc. has announced its intention to acquire savings and investment app Moka.
The deal accelerates Mogo’s plan to launch a free Canadian stock trading platform and will grow the firm’s customer base by 40% to more than 1.7 million customers.
Mogo already offers digital payments, loans, and cryptocurrency trading, but has long-held ambitions to be the leading Canadian digital wallet. It has grown over recent years with deals including a combination with Difference Capital Financial in 2019.
Moka has become a popular investment app with more than 1 million downloads since its 2017 launch. Among its features is a round-up of spare change from daily purposes which is invested in diversified ETFs. Users can invest via TFSA, RRSP, or non-registered accounts.
David Feller, founder and CEO of Mogo, says that the deal, expected to complete in the second quarter of 2021, is another significant milestone for the Vancouver-based fintech.
“By adding these digital saving and investing products – along with Moka’s technology platform and experienced fintech team – we will dramatically enhance what is already one of the most compelling and differentiated value propositions in Canadian finance,” he said. “Moka will complement our existing MogoCrypto account and form the core of MogoWealth, making Mogo’s digital wallet the most comprehensive solution in Canada.”
The acquisition will also expand Mogo’s reach into Quebec. Moka’s headquarters are in Montreal.
International expansion
Moka has expanded from its Canadian base thanks to backing from key investors including Desjardins Capital, National Bank’s NAventures, and Ferst Capital Partners, a private investment firm that specializes in consumer fintech and digital assets.
Last year, it launched its app in France and now has approximately $250 million of assets under management and registered portfolio management capabilities throughout Canada and in Europe.
Despite its growth, founder and CEO Philip Barrar says joining with Mogo makes strategic sense.
“Moka has built a robust customer-centric technology platform and, as part of a larger, more diversified and well-capitalized digital platform, we enhance the opportunity to grow our business and, importantly, to give our members access to even more digital products and tools to improve their financial well-being,” he said.
The Acquisition is expected to be completed by way of a statutory plan of arrangement under the Canada Business Corporations Act whereby all of the issued and outstanding shares and convertible securities of Moka will be exchanged for Mogo Shares, which plan of arrangement will require court approval and the approval of the shareholders of Moka. The transaction is subject to regulatory approvals.
